Millennial renters experience varying fortunes

Published 6:36 pm, Saturday, January 30, 2016

Photo: Richard Vogel

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(AP Photo/Richard Vogel)

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Photo: Richard Vogel

Millennial renters experience varying fortunes

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In some smaller cities across the country, there might be limited options on sites such as apartmentfinder, apartmentguide and apartments.com. But for people seeking to rent in Midland, available units range from $650 to well above $1,400.

The recent oil boom led to a huge increase in rental prices. The downturn hasn’t seemed to affect rentals, according to Realtor Victoria Printz. Her firm had about 75 rentals on the market in January and more than 100 a couple of months previously, she said.

“Prices are down a little bit, but the average sale is the same,” said Printz, a 20-year veteran in realty.

Printz said the reasons people rent vary, including beign uncertain about how long one will be in Midland and wanting more time before purchasing a home.

And for the most part, younger people are the ones who rent, she said.

“Usually, it is people between the age of 20 and 40 who rent,” Printz said.

Some millennials, or adults between ages of 18 and 34, shared their stories of Midland’s rental market during the last two years.

On the move

Wisconsin native Alex Norris, 25, a musician, teacher and adjunct professor, has moved three times since signing his first lease when he arrived in Midland in August 2014.

“I do a lot of stuff based on trying to think financially,” Norris said. “I took an offer from Texas Tech to be a TA and not have to do the whole tuition thing, and I just don’t think musicians should shell out 100 grand a year to go to (another school). It was kind of always get on my feet, pay off a couple of loans from my undergrad, and that’s what I did.”

Norris originally lived with two of his colleagues as a short-term solution because of a difficult renter’s market. He used Craigslist to find his first apartment, which was in a “sketchy” neighborhood. He had a six-month lease and a “very nice guy” as a neighbor.

“It was kind of a little dungeon,” Norris said. “The windows were boarded up, there was no light. It was stuffy, and I think my neighbor across the hall was a drug dealer because these guys with bloodshot eyes would knock on my door and ask, ‘Hey ... is (another tenant) there?’”

A week after Norris moved, he spotted several police cars parked outside of his former complex.

For his next residence, he sublet from a friend of a friend. His quarters didn’t have a kitchen, and he eventually had his fill of "living off a microwave and a toaster.” Then, other circumstances caused Norris to move about two months ago.

Because Norris had only about a week to find a place, he rented a larger apartment for about $200 over his intended rental window.

“I was scrambling, but I did it,” Norris said. “Now, my apartment is a little bigger than what I want, but it’s just nice to have my own place. I can teach at home, and it’s easier to do without roommates.”

To adjust for the higher rent, Norris cut out social activity. It helps that, unlike several peers who are “treading water,” he paid off his undergraduate loans and obtained a master’s degree tuition-free.

“I was really aggressive with paying off my loans, but it kind of came back to bite me when I needed to pay off some car loans, so I was almost too aggressive,” Norris said.

A loan from his parents and selling an old violin helped to offset the new debt.

Although he is not sure how long he will be in the Midland area, he chalks up his experiences in Midland as worthwhile.

“I don’t have anything against where I am right now,” Norris said. “I do want to move to a larger, little-more-happening city, and I know the struggle will be to find work. But that’s why I moved here. I’ve been able to put stuff on my resume.”

In and out of the ‘buyer’s market’

Brett Socha, 29, and his wife had more than just a new frontier to adapt to when they moved to Midland from Birmingham, Alabama, in June 2014. They went from paying about a $700 monthly mortgage payment for an about 3,000-square-foot home to paying $2,000 a month in rent for 1,000 square feet of space.

“That was an adjustment,” Socha said. “The only housing there really was — instead of building a house at a high price — was to rent and go into an apartment. It wasn’t fun.”

Because they arrived during the boom, housing demand drove them to an apartment in Odessa that, while new, was one-third the size of their Birmingham home and about $300 a month more than their previous mortgage payment.

The Sochas ruled out moving to an older complex because “for $200 or $300 more, you could live in a brand-new apartment,” according to Socha, but the new complex had downsides that came from high demand.

“The apartment complex didn’t care about the actual residents because ... people were a dime a dozen,” Socha said. “You could move out, and people would be in it the next day. It was OK; it was just a lot different.”

It was the best they could find after months of searching for a complex that had an available unit built within the last few years.

“We were actually looking to buy (after a while) ... but the oil and gas industry kind of went south, and that caused us to hold back a little bit,” Socha said. “The taxes were outrageous for housing, too. That was another reason to continue our rent.”

After moving to Colorado in December after receiving a promotion, Socha said they did not regret the decision. They now own a house larger than their Birmingham residence for a much lower monthly mortgage.

“We looked there to see our apartment that we were renting because it was available online now, and we were seeing they’re going for $1,100, which I still think is way too much,” Socha said.

The steady investor

Ryan Dixon, 28, who moved to Midland last year, faced a similar situation of wanting a newer apartment since it would mean only a few hundred dollars difference. He visited about 10 complexes between May and the end of June. By the time of his move-in date, the rent of the apartment Dixon chose decreased $300.

“It’s so amazing, the supply-and-demand difference, even back then,” Dixon said.

He had picked the complex because of amenities, price, location and floor plan were the best of the 10, so the price drop came “as a plus,” he said.

Dixon signed a one-year lease but anticipates he could negotiate for lower rent. His reasoning is the decline in the oil and gas industry but also from a less-than-scientific measurement: available parking spots.

“Just based on observational occupancy rates, it appears to be close to 50 to 60 percent occupancy now. Just based on how many parking spots are full every night and all that jazz,” Dixon said. “It’s nowhere near as full as when I first moved in.”

Like other Midlanders, Dixon rented because of an uncertain future. He transplanted from Houston for a new job as an investor for an oil and gas company and, while working full-time, he is working toward a master's degree at Texas Tech University.

“As a younger person, there’s social challenges, but, in the long-term perspective, I think it’s good for your career,” Dixon said. “I obviously can’t speak for everybody, but I certainly know a whole host of people who are here early in their careers for a brief period of time. You go where the money is.”

Dixon is currently debt-free and intends to purchase a house one day but likely not in Midland. He would like to move back to the Houston area. In the meantime, he intends to fully commit to retiring comfortably as “compounding interest is one (heck) of a powerful force.”

Like Norris, he considered a move to Midland a boon to his professional life.

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“If the company sent you here, where it’s not Austin, Texas, that has happening spots for a 20-something on weekends, they appreciate what you’re willing to do and that you’re willing to work and what you’re willing to sacrifice to get the job done,” Dixon said. “I wouldn’t discourage anybody from moving to Midland, especially as younger people know how often career changes occur compared to our older generations. You’re never stuck. You come here to do your time a little bit, and if you want to move down the road, there’s always opportunities to do so.”